New law prevents food delivery platforms from keeping amounts designated as tips or gratuities | Jackson Lewis PC

The Governor of California has adopted Assembly Bill 286 (AB 286) which amends the Fair Food Delivery Act of 2020. AB 286 prohibits a food delivery platform from charging a customer any purchase price for food or drink that exceeds the price displayed by the establishment catering on the Internet of food delivery platform. website when ordering. AB 286 also prohibits food delivery platforms from keeping any portion of amounts designated as tips or gratuities. Instead, the food delivery hub must pay the full tip or tip to the person delivering the food or drink, and any tip or tip for a pickup order directly to the establishment. restoration. Finally, AB 286 requires the platform to disclose to the customer and the catering establishment certain specific information relating to fees, commissions and costs charged to both parties.

AB 286 corresponds to the National Restaurant Association’s Public Policy Principles for Third Party Delivery, which is a set of guidelines promulgated to ease tensions between restaurants and third party delivery services. One of the key guidelines is that “restaurants deserve transparency about the fees charged by third-party delivery companies”.

California is not the first to legislate transparency in delivery services. New York City and Chicago have passed similar legislation, and the state of Nevada is not far behind. Several delivery companies have already adjusted their national operations to get ahead of legislation and remove existing tensions.

This bill comes into force on January 1, 2022.

Jackson Lewis will continue to follow state legislation that is relevant to employers.

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